Wednesday, November 04, 2015

Has Final Fantasy XIV caught World of Warcraft?

The latest news is that World of Warcraft lost another 100,000 subscribers, and is now at 5.5 million subscribers. This is a pretty small loss compared to the previous quarters, and is somewhat unusual given the content drought WoW is going through.

That 5 million number has come up recently in another context, though. FFXIV announced it had over 5 million "registered accounts".

No one is quite sure what SE means by registered accounts, though. Last year, SE said FFXIV had 2 million registered accounts and 500,000 daily logins. With 500,000 daily logins, that 2 million number is almost certainly subscriptions. So if "registered accounts" were what we would call subscriptions last year, then I think it's reasonable to believe that they are subscriptions this year as well.

As well, consider the latest trailer FFXIV has put out for the 3.1 patch. The last frame explicitly says, "Join Over 5 Million Adventurers Worldwide". This again cuts strongly in favor of FFXIV having 5 million current subscribers or equivalents.

Of course, the distribution of subscribers is probably different. WoW probably has more NA/EU players, while FFXIV has more Japanese players.

But in my view, FFXIV is now roughly the same size as WoW. With a new FFXIV content patch coming next week, and no new content in sight for WoW, it's possible that FFXIV will actually surpass WoW and claim the crown of "largest subscription MMO" in the near future.

It certainly puts a different light on Blizzard's decision to stop reporting subscription numbers. It's one thing to report losses when you're still at the top. It's another to confirm that you've slipped to second place.

Yeah, the problem is we don't really know what SE means by "registered account". Not to mention that it's probably a translated term from the original Japanese, so who knows what the original Japanese was implying.

There is zero chance FF14 actually has 5 million current subs. If they did, they would say so. Five million people may have paid for at least one month's subscription since the relaunch, but that is a far cry from active subscriptions.

The sanity check here is that 5 million $12 subs is $720 million in yearly revenue. I haven't poured over the last investor report very closely, but net sales for all of Square Enix across all platforms in the last year was around $1.6 billion.

But SE has always used the registered accounts terminology. Explain to me how you can have 500k daily logins without 2 million subs. Not to mention they launched in China and Korea last year.

As for your sanity check, remember that it's not a fully year of 5 million. They start at 2 million at the beginning of the year. Total revenue is the area under the curve, so assuming linear growth that's 2M * 12 * 12 + 0.5 * 3M *12 *12 = $500 Million.

If SE had 1.6 billion in revenue last year, why is 500 million of that coming from FFXIV unreasonable? Activision has 4.5B in revenue, but many other properties other than WoW, including major ones like Call of Duty.

It's unreasonable precisely because of how SE talks about (or doesn't, in this case) FF14. This press release from back in May says FF14 and DQ10 are making "favorable progress." If we accept your estimation, do you think MMOs making up 1/3rd of the revenue of all of Square Enix would be summed up in a press release as "making favorable progress?"

In any case, I Googled my way to their <a href="http://www.hd.square-enix.com/eng/news/pdf/15q4slides.pdf>PDF slide here</a>. Just look at Slide #17 and tell me FF14 has more than even 2 million active subs. Clearly, even if it somehow <i>did</i>, the very next slide shows how much better they are doing on the mobile game side of things. The end-of-year estimates are nearly 3x as good as the MMOs.

They are only ahead if FFXIV is at just 5m, not 5m+. I don't know that they would even state 5.5m if it was that, rather than just saying 5m+. As that 5 gets closer to 6 maybe they switch over to "almost 6m", but even that I'm not sure they would do, rather than wait to cross 6m and then update (if they do update, FFXIV has always been weird about just casually mentioning milestones rather than doing a big PR release like WoW would do when it was growing).

The small WoW drop was surprising though, yes, but I also suspect they already confirmed they won't be reporting numbers because current numbers look much worse than the numbers at the earnings report cutoff date, and that was a preemptive strike to get around the inevitable "WoW sub numbers drop once again" story come next report.

Blizzard likely bought a quarter's worth of stability with the announcement of Legion and Gamescom. With an announcement like that, there was a lot of speculation that Legion would drop this Fall or Winter. Now, with the projected release date of sometime over Summer 2016, I'd expect to see subs start tanking.

If you are going to try out FFXIV, start as early as you can, so you can still experience the extreme Primals before they are too nerfed. They are amoung the best exepierences in any MMO.

And you should join now not later too, cause now you can still sell low level crafting items well ,if you go into crafting.. which you should. There will be a time, when the majority of players wont need low leveled crafted items anymore.

Otherwise, FFXIV beats WOW on almost every aspect of PvE and crafting. And the GCD, the most missunderstood issue of begeinners and FFXIV haters, is not an issue at all, once you reach level 50.

So it is no wonder, that FFXIV is storming the hearts of MMO lovers. SE has become ambitious with FFXIV and wil continue to push it for the next 3-5 years (at least), with content every few months.